Koch Habits

So, I figured there wasn’t much point in my commenting on the New Yorker profile of the Koch brothers, mostly because as someone who’s directly or indirectly benefited from Koch largess for most of my adult life—the Koch Fellowship as a student; gigs at Koch-funded Reason and Cato—I’d expect folks to be justly skeptical of anything favorable I might write about them. So why bother looking like a suck-up? But I’ll say this much. The idea that they’ve poured a hundred million and change into funding libertarian think tanks, advocacy groups, and educational programs over the years in order to line their own pockets or boost the corporate bottom line seems kind of bizarre. I mean, it’s an insanely inefficient, almost Rube Goldbergesque way to go about it, isn’t it? The big organizations they fund work on a whole spectrum of libertarian issues, so only a fraction of each dollar goes to advocating policy change that would yield some direct financial benefit to them. I mean, we don’t have to mention this to them, but if there’s a percentage for Koch Industries in subsidizing my writing on surveillance, or Radley Balko’s stuff on police abuses, it’s a mystery to me. Maybe it’s elaborate misdirection?

Insofar as most of those groups are trying to change the broader climate of ideas, it’s an awfully long game with a highly uncertain payout. And as the New Yorker piece goes to show, it’s a strategy that’s apt to draw a lot more attention and flak than limiting themselves to doing what every other big business does, which is throwing those millions at lobbying shops that push for concrete, near-term legislative changes with some reasonable likelihood of yielding an immediate and quantifiable return. I’m sure they also like the thought that a society where libertarian ideas have more traction might yield lower taxes and regulatory burdens for them, but isn’t the more parsimonious explanation just that they honestly believe in these wacky ideas they’re funding us to defend?

Now if you’ll excuse me, I need to get back to my monograph, “In Defense of Earth Plunder.”Update: Yglesias writes:

I didn’t mean to suggest the two were mutually exclusive, or that the Kochs don’t engage in both; just that a million dollars you spend subsidizing libertarian philosophy seminars for college students is a million dollars you didn’t get to spend on more immediately rewarding lobbying. Also:

The point is that thanks in part funding dynamics, you couldn’t very well be working at the Cato Institute and start doing a lot of writing about how one reason libertarians ought to ally themselves with the progressive coalition in the United States is that unregulated carbon dioxide emissions constitute a massive violation of the property rights of the adversely effected…

I’m probably not going to start doing a lot of writing about this, because it’s not really my jam. But one reason libertarians ought to ally themselves with the progressive coalition in the United States is that unregulated carbon dioxide emissions constitute a massive violation of property rights.

27 responses so far ↓

I think what you miss is an inconsistency that begs the question about bottom lines (even though I agree that’s not their main concern). If these guys actually care about libertarianism, why are they so bad at it? Libertarianism is all about freedom of thought and action, yet these guys are sponsoring programs that abuse language, threaten the elderly with death, and just plain old fear monger people into actions against their own interest. Then they turn around and apply for the very funds they claimed — through their projects — would result in something analogous to Hitler’s final solution. It’s a soulless way of going about achieving a libertarian society. It makes people assume they’re just about the money. I agree, that’s not necessarily the case. The Kochs are just lost souls who have no idea what they’re for anymore. But again, it’s the soulless tactics that generate theories about pure financial ends.

Worse, “soulless” isn’t just any old adjective that you can place alongside “libertarian”. It’s, philosophically speaking, an alienating adjective. In the same way “fake” is an alienating adjective alongside “duck” — because a fake duck is not a duck at all — a “soulless” libertarianism is not a kind of libertarianism at all. And so properly speaking, the Kochs are no longer libertarians.

In spite of the conflict of interests, Julian, I hope that you or someone on your level will come out in public with this argument — as regrettable as it is and in spite of your benefit from them.

@MBH: I think you’re making a mistake in assuming that their “inconsistency” is due to some internal failing in their political mindset, when in reality it’s simply that they have a large amount of money, and some of it they manage closely, and some of it they just turn over to big umbrella groups to fund people that write things.

If one guy they’re funding has one take on how this should work, and another has a slightly different take, it could be that the ideal “libertarian” approach is not conclusive. Or it could just be that one of them is wrong and the other is not. But none of that has to do with what the Kochs believe or don’t believe personally about the subject as I doubt that they read everything they give money to support.

Also, I think there is a problem where they don’t just want to fund think tanks, but actually want to elect people to office. So they are forced to fund candidates that may be classified as “conservative, with some libertarian tendencies” rather than actually being libertarians. That being said, I’m not a libertarian myself, or a big fan of the Kochs, they’re just people who are part of the background of the politics in my home state, and this is my take on it all.

Really? And here I thought it just meant that it was libertarianism that the speaker disapproved of.

(Could you be clearer about what “soulful” libertarianism looks like as compared to what the Koch brothers are doing, in specific?

Nik’s made useful practical points, but I want to know what “soulful” means other than “what I, the speaker, approve of”.

[And who’s sponsoring what that threatens old people with death? Specifically?

And fear mongering against their own interest?

Isn’t that preciously close to a false consciousness narrative?

Nobody gets to decide what’s in person X’s interest except person X – and the fact that something that helped them shape their view of that interest is described by a hostile commenter as “fearmongering” doesn’t automatically make it not actually their interest.

Could you be clearer about what “soulful” libertarianism looks like as compared to what the Koch brothers are doing, in specific?

Well, one that’s not willing to prompt people’s support (or fund projects that to do so) by claiming that a third party will kill the elderly otherwise. I would think it’s common knowledge that manipulating the emotions of the elderly with the belief that someone’s out to kill them — for the sake of HCR — is more than a bit soulless. If that’s just what I disapprove of — without any objective merit — then I misread what it is to have a conscience.

And who’s sponsoring what that threatens old people with death? Specifically?

The Kochs sponsoring Americans for Prosperity.

And fear mongering against their own interest?

I’d say that 99% of the elderly appreciate social security and medicare. A movement, with a logical conclusion of, phasing out those programs irrespective of what lay behind them would be against the currently elderly populations interest (or at least a really high percentage of them).

[the Kochs] actually want to elect people to office. So they are forced to fund candidates that may be classified as “conservative, with some libertarian tendencies” rather than actually being libertarians.

This part I don’t get. Conservatives have libertarian economic tendencies. Liberals have libertarian social tendencies. Why the fuck are they “forced” to fund conservatives? Is there not just as much reason to fund liberals? And given the mere lip service that conservatives play to libertarian economic ideas, if the Kochs are “forced” to do anything, it would be to fund liberals!

I am guessing the reason to fund these all these things is more like an insurance policy than anything else: by controlling the agenda and media focus they can ensure that negative actions against their businesses and interest will not occur, or if they do they will do so in much milder form than if it had occurred unopposed. In this light, this is actually a very sound investment. Ethical? Maybe, maybe not; but what do ethics have to do with profit?

The Koch brethren are evidently moved by a glorious vision of future society, modeled roughly on the wild West. Everyone slinging a gun, watchin’ out for his own butt, cause he knows durn well ain’t nobody going to help him if he gets dry-gulched.

[…] however, that self-interest is irrelevant. And it certainly doesn’t mean that people should accept Julian Sanchez’ contention that the Koch brothers’ backing of a broad libertarian ideology is something they do to the […]

Several years ago there was a specific lobbying effort by a small group of ultra-rich folks to kill the estate tax (separate from the general effort against the estate tax). That strikes me as classic rent-seeking, but I don’t know whether the Koch brothers were involved.

You’re quite wrong that the Kochs’ investment in Cato (and IHS) is not directly justified as rent-seeking protection for their massive infliction of negative externalities on the American people.

You say that this is less effective than direct lobbying. That’s probably wrong, but even if true it ignore the fact that direct lobbying faces diminishing marginal returns. At some point, funding Cato is going to be more effective than hiring more and more lobbyists.

There are also principle-agent issues, which is to say a lot of lobbyists just rip their clients off, with Jack Abramoff the biggest example. The work of think tanks is also more easily monitored than shadowy lobbyists who claim a lot of influence.

When I worked at Cato in the late 1990’s, out of a staff of about 90 precisely two people worked on defense and foreign policy issues. (Ted Carpenter and Ivan Eland). They probably made a combined $200,000 or so in salary and benefits.

This small investment the Kochs made in them, and the good work they did as small voices against the military-industrial complex, however, lent a great deal of respectability to Cato, which at the same time had a much larger number of paid global-warming deniers on staff.

Julian, you say, “…a million dollars you spend subsidizing libertarian philosophy seminars for college students is a million dollars you didn’t get to spend on more immediately rewarding lobbying.”

Again, this is exactly what I want to call into question. The Kochs ran scholarship application essays through a software program that counted the amount of times “Mises”, “Hayek”, “Friedman”, and “Rand” showed up in the paper. They rewarded students based on the quantity of those names’ appearance irrespective of the papers’ quality. That’s vulgar libertarianism or slogan libertarianism, and thus not really libertarianism. It’s an epistemically closed version of libertarianism: right-libertarianism, you might say.

That some left-libertarians came out of Koch funding is a testament to you — not the Kochs. The purpose of Koch funding was to breed right-libertarians. They weren’t, and aren’t, interested in the advancement of libertarian ideas; they’re interested in corporatism cloaked as libertarianism.

I think that “libertarianism” ought to always be qualified as “right-libertarianism” or “left-libertarianism”. “Libertarianism” per se is a muddling, entangled concept, that serves only to confuse. Breaking it down into right-libertarianism vs. left-libertarianism is not only elucidating, but in the long-run, I think it can be politically effective.

You should want to be purged. Or better yet, just quit. I’d love to see you and Ezra do a show on MSNBC with the PTI (ESPN) format. They could run that program in place of one of the two Hardball hours.

Bob-
Well, I’m prepared to be convinced, but I’d need to see an argument. Just as a general observation, if it were really true that the Kochs’ spending on these very broadly libertarian institutions could be justified by direct economic self interest, it becomes mysterious why the Kochs are so unusual in this regard. After all, most big corporations spend some money on lobbying, and some underwrite much more sector-specific groups that churn out studies useful to their interests. But the whole reason that they’re the subject of this kind of profile is that what the Kochs are doing is abnormal.

I’m also assuming the “staff of 90” you’re talking about includes lots of support staff. Eyeballing the current list, there are about 50 full-time policy scholars, of whom four (Preble, Carpenter, Rittgers, Friedman) jump out as being full-time defense/foreign policy guys, and several others at least somewhat touch on those issues. By contrast, only Pat Michaels and Jerry Taylor are comparably dedicated to energy/environmental issues, and I don’t think (?) that either is literally a “global warming denier,” even if they argue that the probable severity of warming has been overstated.

An interesting contrast is in Steven Teles’ “The Rise of the Conservative Legal Movement” which details a past in which libertarians initially had to rely on business support (along the lines of Chamber of Commerce) before starting their own institutions.

The idea that they’ve poured a hundred million and change into funding libertarian think tanks, advocacy groups, and educational programs over the years in order to line their own pockets or boost the corporate bottom line seems kind of bizarre.

… it seems a bit naive. The thing about True Believers, whether they are the Koch brothers, the Scaife/Mellon clan, religious fundamentalists, etc., is that they take the long view. It is perfectly consistent for them to spend money on long-term agenda items, like funding people like Julian Sanchez so long as they keep churning out papers and blog posts consistent with the Koch goals.

Also, tobacco companies sponsor art exhibits, Home Depot sponsors Olympic athletes, and there is no end of Funds started by robber barons that have done things that seem good. You can be cynical and say this is PR and/or assuaging a guilty conscience, or you can be charitable and say that because someone has appalling views in one area does not mean he or she is completely evil. But I do think you ought to be aware of why billionaires don’t necessarily spend all their money on lobbying for short-term gains.

Did Cato fire Will Wilkinson and Brink Lindsey because they advocated a political coalition with liberals and that offended big donors? If not, why did they go? If so, how can we take the premise of this post seriously?

Julian, thank you for your reply. I agree with the other comments pointing to the tobacco companies funding organizations that don’t do tobacco lobbying. In so doing, I don’t think the boards of these companies are violating their fiduciary duties to shareholders. Do you?

Second, the Kochs aren’t that unusual. Cato gets money from lots of other billionaires. Rupert Murdoch was on the board of directors when I was there too, as was Fred Smith of FedEx.

The scale of the Kochs’ spending just reflects how extremely wealthy they are. Pricing in the negative externalities of burning coal and methane for 80% of our electricity could cost them $10 billion personally. Spending $5 million a year, or 0.05% of that, on libertarian organizations, including credibility-enhancing operations that have nothing directly to do protecting their ability to impose huge negative externalities strikes we as a clearly wise investment.

Likewise, the estate tax could cost them well over $10 billion. They could hardly take a tenth of that, over a billion dollars, and spend it all lobbying the 5 or 6 swing senators on the issue. Diminishing returns to lobbying demand other forms rent-seeking.

Here’s a more concrete example. A number of young staffers there formed an organization called “Ban the Ban” to organize small businesses against a ban on smoking in DC bars. They didn’t do so at the marching orders of Phillip Morris. Rather PM realized this benefit after years of spreading money around libertarian organizations. You scratch my back, I’ll scratch yours.

That’s just how Washington works. Direct bribes are pretty rare, lobbying can be very expensive and is hard to supervise, but generally speaking spreading a lot of money around DC obtains good results.

Being a libertarian, you’re confusing utility maximizing behavior with satisficing. Reading too much Rand/Hayek makes you think the world works according to the former. But it doesn’t. The Koch brothers have a lot of money. A lot. They don’t need to (are aren’t cognitively able to) do every behavior that is a straight line from A (being evil) to B (maximizing Koch industries’ profits). But that doesn’t mean that even their “inefficient” actions are directed toward this goal. They probably don’t even realize anymore how their initial lofty commitment to a set of stupid libertarian ideas has morphed into the warped agenda that will leave this country worse off for decades.